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WASHINGTON—Package labels on fresh cuts of meat that identify where animals were born, raised and slaughtered face an uncertain future after successful trade challenges from Canada and Mexico.

Agriculture secretary Tom Vilsack said the United States is running out of options for the meat labels, which are required under a 2008 law.

A Country of Origin Labelling (COOL) label might say, for example, that the animal was “born in Canada, raised and slaughtered in the United States” or “born, raised and slaughtered in the United States.”

The World Trade Organization (WTO) has agreed more than once with Canada and Mexico that the labels on steaks, ribs and other cuts of fresh meat give the U.S. livestock industry an unfair advantage.

In its most recent ruling Oct. 20, the WTO said the labeling requirement forced meatpackers to segregate and keep detailed records on imported livestock, giving them an incentive to favour U.S. livestock.

The trade organization ruled in 2011 and upheld in 2012 that an earlier version of the labels was discriminatory.

A spokesperson for U.S. Trade representative Michael Froman said the government has not decided whether it will appeal the latest WTO decision.

If the October ruling stands, Canada and Mexico could retaliate against the U.S. with other trade sanctions if the labels aren’t changed or scrapped.

Vilsack said he believes Congress either needs to change the law or Mexico and Canada need to negotiate a settlement with the U.S.

“There is no apparent regulatory solution available that could make this rule compliant with the WTO’s recent decision and also uphold the law Congress passed,” Vilsack said in a statement.

Canada and Mexico need to tell the U.S. “more clearly and more specifically, what, if any, variation of this will work for them,” the agriculture secretary said last week at an event in Kansas City, Mo.

The embattled COOL rules have support from consumer groups and some farm groups.

U.S. ranchers who raise cattle near the northern border and compete with Canadian ranchers have pushed hardest for the labeling law, which Congress originally wrote in 2002 and revised in 2008 after years of haggling with the meat industry.

Ranchers and meatpackers in the Southwest who do a lot of business with Mexico have traditionally opposed it.

It’s unclear what lawmakers will do.

But the new Republican Congress is expected to be friendly to the meat industry, which has called for repeal of the COOL law, saying it is burdensome.

Meatpackers have sued the government to block it, so far unsuccessfully.

Farm-state lawmakers said earlier this year that they didn’t have the votes for repeal.

But Rep. Mike Conaway (R-Texas), the incoming chairman of the House Agriculture Committee, and Sen. Pat Roberts (R-Kan.), expected to head the Senate agriculture panel, are both from cattle-heavy states and have championed the meat industry.

After the ruling was issued, more than 100 meat, agriculture and food industry groups concerned about sanctions down the road called on Congress to immediately repeal parts of the rule.

“Given the negative impact on the U.S. manufacturing and agriculture economies, we respectfully submit that it would be intolerable for the United States to maintain, even briefly, a rule that has been deemed non-compliant by the WTO,” the industry groups wrote.

Canada is also calling for congressional action.

“The onus is now on the United States to put forward a solution acceptable to all parties that removes the unfair segregation and discrimination against Canadian cattle and hogs,” Canadian Agriculture Minister Gerry Ritz said in a statement to The Associated Press.

He said Canada “will take whatever steps may be necessary, including retaliation, to achieve a fair resolution.”

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